I have a friend submitting an LOI and here’s a question he asked me:
“The sellers want a deposit with the LOI, and they are saying that the deposit goes "hard" after 30 days without a signed deal. Does this make sense? Is there something that is more 'normal' so we don't lose the deposit?”
Curious what feedback or suggestions come to mind?
Deposit with LOI?
by a searcher from Indiana University at Bloomington
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
Don’t pay to peek.
Never make an earnest money deposit or sign a purchase contract—no matter how many contingencies are in it—before you and your advisors have analyzed the company, obtained an expert opinion of value and defined alternative terms of purchase.
If you doubt the wisdom of this advice, make an offer on a business you don’t really care about. Later, when you think you know what it is worth, try explaining to the seller why your offer must change.